As to both SDR’s posts, the numbers are what they are. You can put whatever spin you want on them, but it won’t change the numbers.
Regarding the tightening of lending standards, a fella in my neighborhood reports that he was just approved for a refi of his 1st mtg., subordinating a HELOC, with a total LTV of 98%. Fixed at 6.6%, 30 yr with 10 yr IO. No docs. As in zero, as in stated income. And this is through the back-alley outfit of….Wells Fargo. Standards may be tightening – may be – but they sure ain’t tight.
As for lenders going belly-up in an epidemic of defaults – what are the chances of this really happening? How many rescue possibilities are out there, from the govt. or from the lenders themselves? Does anyone really believe that the lenders want these homes on their books? And who are these lenders, anyway? Aren’t most loans just packaged and sold as investments, and the entity you are writing your check to only services the loan (and takes a slice of the pie each month before passing along the balance to the investors). Don’t the servicing co’s want to keep the cash flowing through? Do you think the investors want to own your home? Or do they just want to get paid? I suppose the bottom line question is why won’t there be some kind of bailout (if necessary)?
The folks who posted they just bought provide real-world examples of folks who are not using creative/exotic financing to purchase property. There are alot of those folks here in SD. There is another thread regarding Carlsbad sales that seems to indicate alot of folks who did not need/use exotic financing to make their purchases. What does this mean? Alot of folks have alot of existing equity and can easily trade up? Alot of folks making alot of money in SD? (I do think SD is underrated in terms of income – there is alot of money being made in this town)
Don’t get me wrong – I think we will see prices pull back a bit more before this correction is done – but I do not subscribe to the “sky is falling” mentality that some extremists embody.
